FTSE All-Share Index (.FTAS) Market Round-Up

Last week, the benchmark FTSE All-Share Index (.FTAS) started on a positive note and maintained the gain for most of the week. The index witnessed marginal profit booking in the latter half of the week, still managed to close in green and settled 3771.73 with an overall gain of ~1.87 percent for the week ending March 05, 2021. The recent week also started on a significant positive tone and now prices are approaching the major resistance level 3900. On the weekly chart, RSI (14-period) is trading at ~60 levels and seems supportive of upside movement. Prices are well placed above 21-period and 50-period SMA, providing strength to the index. However, the downward trend line still acts as the resistance for the index.

The market reacted positively to the budget 2021 announced by the Chancellor of the Exchequer Rishi Sunak on March 03, 2021. The Chancellor has placed a £65 billion three-point plan to provide support for jobs and businesses to build a path to recovery as the nation emerges from the pandemic. The latest speech given by the Bank of England (BOE) Governor Andrew Bailey on March 08, 2021 about the post-Covid future further acted as the catalyst for upside movement.

Global Markets Wrap-Up

Wall Street witnessed mixed movement last week. S&P 500 settled at 3841.94 with an overall weekly gain of ~0.81 percent while NASDAQ Composite Index settled at 12920.15 with an overall weekly loss of ~2.06 percent for the week ending March 05, 2021.

The indices reacted to the mixed data events released by the US Bureau of Labor Statistics last week. As per the data, the claims for jobless benefits increased last week to 745,000 from 736,000 the prior week while the jobs data for the non-farm payrolls increased by 379,000 in February 2021 supported the market sentiments in the latter half of the week.

Having understood the US market performance over the past one week, taking cues from major global news, and based on our technical analysis of the FTSE All-Share Index (.FTAS) for the upcoming week, now let us have a look at the two FTSE listed stock picks from the technical standpoint. Noted below are our recommendations based on generic insights, entry price, target prices, and stop-loss for Taylor Wimpey PLC (LON: TW.) and Photo-Me International PLC (LON: PHTM) for the next 2-4 weeks duration:

Taylor Wimpey PLC

Taylor Wimpey PLC (LON: TW.) is a house building company, headquartered in Buckinghamshire, United Kingdom. The company operates from 24 regional offices and its segments include housing in United Kingdom and housing in Spain. Noted below are the key price indicators for the stock:

Price Action Analysis (on the Weekly Chart)

TW.'s prices are sustaining above a downward trend line breakout level for the past one week and broke the major resistance level of GBX 176.20 on March 04, 2021. The stock recently started to move upside after the consolidation of more than 3 months and for the short term (2-4 weeks) we can expect the continuity of upside momentum in it. The next important resistance level appears at GBX 214.50 and prices may test that level in the coming sessions. Any further movement above GBX 214.50 accompanied by volume may extend buying in the stock.

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI is trading at ~62 levels and indicating a positive trend in the stock. The weekly volumes are showing an increasing trend and seem supportive of the upside movement. The CMP is above the 21-period and 50-period SMA, further providing strength to the prices.

Financial Summary:

Summary of the Key Financial Metrics for the past four years for Taylor Wimpey PLC is as follows:

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, we can conclude that Taylor Wimpey PLC is looking technically well-placed on the chart and we have a ‘Buy’ rating on the stock. Investment decision should be made depending on an investors’ appetite on upside potential, risks, and any previous holdings. This recommendation is purely based on technical analysis, and fundamental analysis has not been considered in this report. The summary of our recommendation is as follows:

Photo-Me International PLC

Photo-Me-International PLC (LON: PHTM) is well known for its photo booths, operates and sells a wide range of instant service equipment. The company also operates photographic fun products, digital printing kiosks, & children's rides. The company has its presence in over 20 countries across Asia, Continental Europe, UK & Ireland. Noted below are the key price indicators for the stock:

Price Action Analysis (on the Weekly Chart)

PHTM prices broke the downward trendline by an upside at GBX 49.30 on February 15, 2021 and hovering around the breakout level for the past 3 weeks. Prices recently started to catch an upside direction and for the short term (2-4 weeks) we can expect further upside momentum. The next important resistance level appears at GBX 75.00 and prices may test that level in the coming sessions. 

Technical Indicators Analysis (On the Weekly Chart)

On the weekly chart, RSI is trading at ~56 levels and indicating a positive trend in the stock. The weekly volumes seem supportive of an upside movement. The CMP is above the 21-period and 50-period SMA, further providing strength to the prices.

Financial Summary:

Summary of the Key Financial Metrics for the past four years for Photo-Me International PLC is as follows:

General Recommendation:

As per the above-mentioned price action and technical indicators analysis, we can conclude that Photo-Me International PLC is looking technically well-placed on the chart and we have a ‘Speculative Buy’ rating on the stock. Investment decision should be made depending on an investors’ appetite on upside potential, risks and any previous holdings. This recommendation is purely based on technical analysis, and fundamental analysis has not been considered in this report. The summary of our recommendation is as follows:

Upcoming Major Global Economic Events

Market events occur on a day-to-day basis depending on the frequency of the data and generally include an update on employment, inflation, GDP, consumer sentiments, etc. Noted below are the upcoming week's major global economic events that could impact the FTSE All-Share Index and listed stocks’ prices.

Investment Related Risks: Based on the technical analysis, the risks are defined as per risk-reward ratio (~0.60:1.00), however, returns are generated within 2-4 weeks’ time frame. This may be looked at by Investors with sufficient risk appetite looking for returns within short investment duration. Investment recommendations provided in this report are solely based on technical parameters, and fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, and social and political instability risks etc.

Entry Price: For the given recommendation(s), Entry Price is assumed be at or above a certain level. However, a slight deviation on either side in the ‘Entry Price’ can be considered depending upon the potential expected or indicated.

Note: How to Read the Charts?

The Green colour line reflects the 21-period moving average while the red line indicates the 50- period moving average. SMA helps to identify existing price trend. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps in easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

A trailing stop-loss is a modification of stop-loss in case of favourable movement in the price to protect the gains. We suggest Investors to Trail the Stop-Loss as per the aforementioned levels if the stock price achieves more than 50% of the Target 1. Investors should consider exiting from the position as per the Trailing Stop-Loss level if the price starts moving downwards after achieving more than 50% of the Target 1.

Risk Reward Ratio: Risk reward ratio is the difference between an entry point to a stop loss and profit level. We suggest ~60% Stop Loss of the Target 1 from the entry point.

The reference date for all price data, volumes, technical indicators, support, and resistance levels is March 08, 2021.

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

GBP: British pound sterling

GBX: British pence sterling

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by investors. Technical reports in general chart out metrics that may be assessed by investors before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.

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